The Nasdaq started the new year with a thud at midday Tuesday, as Cisco and a slew of companies downgraded by Robertson Stephens led techs in decline. The Nasdaq was off 5 percent, or 131.21 to 2,339.31 and the Dow Jones industrial average was off 86.61 to 10,700.24.
Citing an expected "significant slowdown" in information technology (IT) spending, Robertson Stephens downgraded a number of stocks in the data availability business Tuesday. Several security vendors were cut on similar concerns. CacheFlow (Nasdaq: CFLO), down 2.56 to 14.5, Quest Software (Nasdaq: QSFT), down 5.88 to 22.18, EMC (Nasdaq: EMC), down 9.68 to 56.81, Veritas (Nasdaq: VRTS), down 20.62 to 66.87, Network Appliance (Nasdaq: NTAP), down 13.59 to 50.59 and Inktomi (Nasdaq: INKT), off 4.38 to 13.5, were all downgraded.
Cisco (Nasdaq: CSCO) fell 3.81 to 34.44, Intel (Nasdaq: INTC) was up 0.69 to 30.75, Oracle (Nasdaq: ORCL) fell 1.62 to 27.44 and Microsoft (Nasdaq: MSFT) was up 0.69 to 43.63.
Extreme Networks, Inc., (Nasdaq: EXTR) fell 7.69 to 31.44 after it said it will buy privately held Optranet, a developer of broadband IP services for about 2 million of its shares in a move to extend its "ethernet everywhere" strategy.
WebMD (Nasdaq: HLTH), down 1 to 6.94, and News Corp. (NYSE: NWS), up 0.31 to 32.56, ended two joint ventures Tuesday as the online health company renegotiates a host of strategic alliances in an effort to turn a profit.
Pegasystems (Nasdaq: PEGA), down 0.19 to 2.12, said its fourth quarter revenue will fall 40 percent sequentially, and it will lay off workers to improve profitability.
Former dot-com poster stock theglobe.com (Nasdaq: TGLO) was up 0.15 to 0.44 as it said it would narrow its losses and reach break even by the end of 2001.
Adaptive Broadband Corp. (Nasdaq: ADAP) was more than halved, down 3.25 to 2.88, Tuesday after it lowered guidance for its second quarter.
Amazon (Nasdaq: AMZN) fell 1.56 to 14, AOL (NYSE: AOL) shed 0.49 to 34.21 and Yahoo! (Nasdaq: YHOO) lost 1.13 to 28.94.